Digital platforms like Uber and Rappi generate underemployment and informality

03/06/2019

The digital platforms, contrary to improving the conditions of workers in Latin America, mediate in the labor market in a similar way to what the "recruiters" do in the Mexican countryside. They participate as intermediaries and keep most of the profit, paying for underemployment and informality, exposes a report from the Economic Commission for Latin America (ECLAC) and the International Labor Organization (ILO).

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"Technological innovations (...) have led to the emergence of a work agreement that has been called" digital daily work". It shares many of the characteristics of the work of traditional day laborers, but the recruiter has been replaced by digital platforms that connect supply and demand," warns The Future of Work in Latin America and the Caribbean.

The report details that although by the end of 2018 the regional unemployment rate did not increase (for the first time since 2015), there was not a rebound in labor demand, while most of the new jobs are not salaried. This situation is expected unchanged this year, given the growth expectations in the region and a per capita gross domestic product "almost stagnant" for six years.

"The performance of the economies of the region in the first months of 2019 and the perspectives for the rest of the year do not support the forecast of significant improvements. In particular, the creation of salaried employment will remain weak and the gains in average real wages will be small. On average for the year, it is projected that the unemployment rate will remain virtually unchanged from 2018, around 9.3 percent in urban areas and 8.0 percent nationwide," the document stresses.

ECLAC and the ILO detail that works through platforms have an ambiguous figure. They can be considered self-employment, which added to the informality in salaried employment "represents an additional step backward to progress towards the Sustainable Development Goal 8", of the 2030 Agenda, decent work.

They resort to the figure of the recruiters of the Mexican countryside to exemplify: that intermediary familiar with the local labor market and that charges a commission or a percentage of the respective salaries. At the same time, workers are paid for the volume of work done, without guaranteeing a base salary or a minimum number of hours to cover.

"In summary, despite the emergence of new forms of non-standard work, such as platform-based work, many of the current challenges with respect to decent work are strikingly similar to those that have existed during the 100-year history of the ILO."

In this sense, the organizations recommend that these platforms be regulated with "regulatory measures that provide workers with a minimum number of hours, guaranteed and predictable"; as well as collective representation for employees and employers.